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East Asia Faces Slower Growth Trajectory as China's Economy Stumbles, Reveals World Bank Report

  • Posted on October 2, 2023
  • News
  • By TSW NEWS DESK
  • 125 Views

The World Bank has revised its growth projections for East Asia and the Pacific due to various economic factors. According to the latest semi-annual report, developing economies in this region are expected to experience slower growth in 2023 and 2024. This adjustment reflects the ongoing repercussions of tightened financial conditions and a sluggish global economic environment.

East Asia Faces Slower Growth Trajectory as China's Economy Stumbles, Reveals World Bank Report

The World Bank has revised its growth projections for East Asia and the Pacific due to various economic factors. According to the latest semi-annual report, developing economies in this region are expected to experience slower growth in 2023 and 2024. This adjustment reflects the ongoing repercussions of tightened financial conditions and a sluggish global economic environment.

The World Bank's estimates indicate that the gross domestic product (GDP) growth for East Asia and the Pacific is forecasted at 5 percent in 2023, with a further decrease to 4.5 percent in 2024. These numbers are a deviation from earlier forecasts made in April, which had predicted growth rates of 5.1 percent for 2023 and 4.8 percent for 2024. Nevertheless, it's important to note that despite the downward revisions, East Asia and the Pacific continue to outpace many other emerging markets in terms of growth.

China, as a significant player in the region, is contributing to this downward trend. The world's second-largest economy is expected to expand by 4.4 percent in the coming year, down from the previous projection of 4.8 percent. This adjustment can be attributed to challenges within China's economy, including property market concerns, rising debt levels, and reduced economic momentum following the initial post-Covid reopening. Nonetheless, China's GDP forecast for 2023 remains steady at 5.1 percent.

The World Bank's report emphasizes the interconnectedness of economies in the region, stating, "What happens in China matters for the whole region." It underscores that a 1 percentage point decline in China's growth is associated with a 0.3 percentage point reduction in regional growth.

Excluding China, the outlook for East Asia and the Pacific in 2024 appears slightly more optimistic. The region is expected to experience improved growth as the global economy recovers, leading to increased foreign demand for its manufactured goods and commodities. However, the report also highlights potential risks, including geopolitical tensions and the possibility of natural disasters, such as extreme weather events, which could disrupt the projected growth trajectory.

Overall, the World Bank's revised growth estimates underscore the challenges facing East Asia and the Pacific, particularly in light of China's economic struggles. While the region is expected to see a slowdown in the coming years, it remains resilient and positioned for recovery as global economic conditions improve.

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